Ron Kirk Responds to Free Trade Skeptics

As President Obama's chief trade adviser and negotiator, U.S. Trade Representative Ron Kirk also has the tricky task of promoting free trade at a time when soaring unemployment has Americans anxious to protect U.S. markets. The challenge doesn't rattle Kirk, who empathizes with public suspicion -- even arguing that "people have reason to be angry" over weak enforcement and jobs lost overseas -- but insists that global trade done right can add thousands of American jobs.

In addition to backing the president's recent calls for Congress to pass pending trade agreements in South America and Asia as a way to create American jobs, the former Dallas mayor has also pushed new initiatives to encourage and assist more small businesses in exporting their products.

Kirk, the first African American to serve as U.S. trade representative, talked with The Root about what policymakers have learned since the failures of the North American Fair Trade Agreement, how black small-business owners have a unique advantage in the export game and why we must all start thinking globally or be left behind.

The Root: For months, President Obama has been urging Congress to approve pending trade agreements with South Korea, Panama and Colombia -- but he hasn't actually submitted them to Congress for consideration yet. Why the delay?

Ron Kirk: The president charged my office with the responsibility to address the outstanding concerns with each of these agreements that had prevented their passage in the previous administration. [After they were addressed,] then we could move forward, hopefully get bipartisan support and also help address his number one concern, to create and sustain jobs. We worked diligently over the last 18 months to do that, and we have been ready to move forward with these agreements.

We have also been insisting that Congress include the other element of our trade package -- the Trade Adjustment Assistance program, which is a safety net for workers who, through no fault of their own, may be displaced from their jobs [because of increased imports]. Congress allowed that program to expire in February, and we've been working with them on a way to get it renewed.

Democrats would prefer to move on the Trade Adjustment Assistance program first. The Republicans have insisted that we move on the [free trade agreements] first and do Trade Adjustment Assistance later. We've been trying to find a way to move everything forward at the same time. That's been the holdup.

The good news is that we believe we have a bipartisan template that has been signed off on by the chairs of the House Ways and Means and Senate Finance committees. If we can get Congress to move on Trade Adjustment Assistance, the president has made it plain that he's ready to send the agreements up.

TR: Of the three agreements, which is your top priority?

RK: It's not my place to say one is more important than the other. At a time when we have an unemployment rate that the president believes is unacceptably high, each one of these is important. The three agreements in total have the ability to add $12 billion to our GDP and our export base, but more critically to help us to add over 70,000 jobs.

One reason I was willing to take on a portfolio of trying to convince Americans that trade could be a part of a balanced economic approach is that I had a president who was willing to honestly address the reality that more and more Americans have grown skeptical about trade. They believe that, while we get all the consumptive benefits, the jobs have gone elsewhere.

The president understands that if we're going to ask the American public to believe in the job-creating potential of trade, we need a balanced approach. We are willing to move forward with the trade agreements, but it has to be packaged with that commitment that we're going to take care of America's workers.

RK: I spent the last 18 months not only negotiating and addressing some of the challenges with these agreements, but also traveling around the United States visiting with stakeholders. We wanted to find out: What is it that you're upset about?

One of the biggest complaints we heard is that nobody enforces these agreements and everybody takes advantage of us. In the case of NAFTA, many people were concerned that labor and environmental protections were not embedded in the agreement. Well, we've learned from that. All three of these agreements have the strongest labor and environmental provisions that we could negotiate.

In the case of South Korea [pdf], we specifically addressed the concerns of our friends in the automotive sector that there was too huge an imbalance in terms of the access to markets. Korean car manufacturers freely sell to America, but we had great difficulty accessing that market. Well, we fixed that.

In the case of Colombia [pdf], there were legitimate concerns about violence against labor leaders [pdf] and union organizers. We worked with the new Santos administration in a coordinated way, with our departments of State and Labor, and developed a labor action plan that we think greatly enhances the administration of labor laws in Colombia but also the protection of the rights of workers.

In the case of Panama [pdf], we had the issue of Panama having been labeled a tax haven, and we were able to resolve that. I'm not going to tell you the agreements are perfect, but they are much better and much more balanced than when we first took office.

TR: Another approach to creating American jobs has been your focus on small and midsize businesses. How has the agency reached out to these smaller companies to help them market their products internationally?

RK: President Obama's State of the Union address in 2010 announced what he called the National Export Initiative, with the goal to double our exports in five years. He instructed every agency within the government that has anything to do with trade to work in a very coordinated manner to make sure we reach that goal. One of the things we've focused on is the reality that of the roughly 280,000 businesses in the United States that export, over 90-plus percent of them are what we define as small businesses.

From my experience as a mayor, and from the research that we got through the Small Business Administration and the International Trade Commission, we know that most net new job growth in America occurs in small businesses. We have focused on what we can do to expand the export capabilities of those roughly 270,000 small businesses that are exporting now, but we have also been engaged in an effort to educate and identify other businesses that are making a product that [they] may not be exporting.

We have held export roundtables around the country. We are pushing out more information on our websites -- both at USTR.gov and Export.gov. We are working creatively with FedEx and UPS, for example, to help us know who are these businesses that continually ship packages into Brazil, Mexico or Africa, and then going to those businesses and saying, "If you're shipping to one customer, let us help you find more."

TR: Small businesses are also more likely than larger companies to be black-owned businesses. What advice do you have for black business owners who want to take that step of exporting their products?

RK: We happen to believe that in many cases for our businesses of color, they have a hidden advantage because of the Diaspora. Of our small businesses who export, disproportionately they tend to export to some connection they have with their homeland or family, whether that's Latin America or Africa. We want business owners to begin to think about the power to grow their companies by exporting.

TR: You mentioned that people you've met around the country largely think that trade is bad for American jobs. Are there common misconceptions about trade, and what do you say to those who are wary?

RK: I don't try to turn people's wariness into misconceptions. In many cases, people have reason to be angry about trade. I'll be honest -- we have not always enforced our agreements. But in the big picture, Americans get it. All of us understand that we benefit from open, competitive markets; frankly, it's cheaper to clothe our kids, put food on our table, to buy the latest technology. But what I've heard from Americans is, "We want the jobs. We don't want all the jobs to go to Canada or Mexico or Asia."

So we've talked to them about the opportunity that we have now. All business is about where customers are, and the reality is that we live in a world where 95 percent of the world's consumers live outside the United States. For me it's not even a question. We have to go compete for these new consumers.

A thoughtful trade policy that not only opens these markets but has strong labor and environmental provisions, and strong enforcement tools, is a great way for us to sell to those emerging markets the way that we've allowed them to sell to us the past 30 years.